Shortages and Threats from Chavez

No surprise, shortages are common symptom of socialism as fewer goods are produced. As the system collapses greater threats and repression are now needed to force people into submission.

HARD on the heels of winning a referendum to abolish term limits last month, Hugo Chávez, Venezuela’s president, is trying to fend off economic worries by taking on the private sector, especially companies in the politically sensitive food and farming industries.

First to feel the impact were rice processors. A rice plant belonging to Cargill, an American company, was seized for allegedly violating the “food security” law. Two plants owned by Empresas Polar, Venezuela’s largest private conglomerate, were taken over “temporarily” to enforce production of price-controlled rice. Like other companies, Polar argues that controls force it to sell at a loss. It has been selling flavoured varieties of rice, hitherto unregulated. Mr Chávez rejects this argument, and threatened to expropriate all Polar’s businesses (which include brewing) and to pay compensation in bonds rather than cash.

Rice is a staple for Venezuelans, but it has recently been scarce. The government claims there is no shortage. But rice producers say output has fallen because there is no incentive to invest in either factories or farms. They point out that the government itself supplies around half the market, and complain that its imports are undermining their businesses.

He will buy food for now and demonize opponents foreign and domestic to stay in power, but that won't be enough. By the way Chavez's transformation into a true left wing dictatorship is becoming complete as he is now attacking workers:

This time will be different, he says, with the army siding with the poor against the rich, and economic tension providing an opportunity to move forward with socialism. But he is being as tough on trade unions as on business. Workers on the Caracas metro, protesting about the government’s refusal to respect collective agreements, were threatened with a military takeover. He denounced workers at Sidor, a recently nationalised iron and steel plant, as “corrupt” and “saboteurs” for protesting over wages and conditions.

Saboteurs was the catch all phrase Stalin used as an excuse to why his plans didn't work, its an ominous phrase and an even uglier turn of events.